WORLDWIDE MARITIME NEWS XI
1.- UASC- KOREA´S HYUNDAI HEAVY INDUSTRIES AGREEMENT FOR MEGA-CONTAINER SHIPS
UASC and Korea´s Hyundai Heavy Industries have signed an agreement for a new 18.000TEU vessels bringing the total order to 17 ships, including 11 14.000TEU and 6 18.000TEU. These vessels and UASC's enhanced partnership agreements enable the Company to improve its competitiveness in the key trade lane between Asia and Europe where the 18,000 TEU vessels will be deployed. All new vessels will enjoy the most advanced fuel economy in the industry, including being delivered as “LNG ready”, a first in the industry for vessels of this size. It will allow to improve cost efficiency and enhancing environmental friendliness, bringing a clear benefit for its customer.
Ocean carriers are moving ahead with the creation of bigger alliances, even though regulatory authorities have yet to pass judgment on them. P3 involving Maerks, Msc and CMA-CGM; G6 involving Hapag-Lloyd, NYK, OOCL, HMM, APL and MOL; CKYHE involving Cosco, K-Line, Yang Ming and Evergreen are the three mega alliances that could be up and running by the middle of the year. The problem is, are these alliances subject to a regulatory approval test if their market share exceed 30%? This matter has prompted the UE to request comments about the new maritime conferences rules. This EE rules will allow specifically alliances between shipping companies making an exception of European competence rules. Market shares over 30% should not be considered excessive by Regulatory Authorities. A potentially dominant position like this can be accepted providing it entails clear advantages to shippers, and no abuse of a dominant position takes place.
3.- NEW FUEL RULES FOR SHIPS COULD PROMPT GASOIL PRICE SPIKE
New fuel rules for ships entering low sulphur zones around northwest Europe and North America next year could trigger a price spike in European gasoil, whilst refiners will struggle to offload unwanted fuel oil. From January 2015, ships entering “Emission Control Areas” (ECAs) in the Baltic, North Sea and English Channel and around the North American coast, will have to switch from low sulphur fuel oil (LSFO) with 1 percent sulphur content to 0.1 percent gasoil. Shipowners will opt for gasoil rather than using exhaust filter systems known as scrubbers or alternative fuels such as liquefied natural gas (LNG) that will prompt a short-term price spike in gasoil. As a consequence, cheap gasoil will be so easy to find as ship owners will have to compete with existing gasoil buyers in North Africa and West Africa, pushing up prices before the market adjusts to the new demand. The switch may offer a boost to European refiners in 2015 and 2016 but that will be short-lived as Russia ramps up 10 ppm (diesel) production.
4.- NEW BUILDING PRICES CLIMBED BY 20% ON AVERAGE DURING 2013
Shipowners who invested in newbuildings during the 2012-2013 are the biggest gainers of the current market. They managed to take advantage of low demand and thus low prices for new buildings. In these stage, they were able to combine the latest ECO designs on offer, they managed to negotiate a rich specification, they chose between the best shipbuilders and of course they secured historically low prices and favorable payment terms. On top of that, they even took options. Nowadays, with average newbuilding prices climbing by 20% over the course of 2013, it's without a doubt that those owners or investors have managed to obtain solid returns on their investment in today's market.
5.- MEDITERRANEAN/NORTH AMERICAN FREIGHT RATE STAGNANCY
Ocean carriers were unable to increase freight rates between the Mediterranean and North America from November to January due to continuing poor vessel utilisation and the approaching threat of P3. According to Drewry's Container Freight Rate Insight, the average all-in freight rate quoted to forwarders for spot cargo from Genoa to New York remained a poor $1,950/40ft. Maybe it could be as a result of New York´s port difficulties, but it is not, because the average freight rate from Genoa to Houston declined from $1,820/40ft to $1,760/40ft, and the average from Genoa to Montreal fell from $3,240/40ft to $3,110/40ft. Industry sources say that westbound contract freight rate levels also fell at the beginning of January, prompted by concern over future market share once the P3's new services are launched.